Insurance Rates at Issue as Stricter North Florida Building Code Implemented

Florida lawmakers moved quickly Wednesday to close the so-called “Panhandle exemption” that allows looser building codes in Northwest Florida, today’s Pensacola News-Journal reports.

Just how much that might lower state property insurance rates for consumers remains to be seen, however.

“This legislation addresses the outdated notion that the Panhandle is somehow less prone to major storms. I ask for your … support to help make the Panhandle as safe as we can,” said Marti Coley (R-Marianna), who sponsored the bill.

The House voted unanimously to pass the bill, and the Senate did the same with its version. Gov. Charlie Crist is expected to sign the legislation.

Senators in Panhandle districts offered a stronger defense of the exemption that politically connected North Florida legislators have kept in place for nearly a decade.

Critics have claimed the exemption was not based on science, while its defenders say doing away with it would add to the cost of homes, already rising throughout North Florida. Combined with Florida mortgage payments, insurance and taxes pose difficult obstacles to homeownership.

“This will not have anything to do with rates being stabilized or rates going up,” Democratic Sen. Al Lawson of Tallahassee said before the Senate passed its bill. “This is just to recognize that we do not have the resources you have in other areas [of the Florida housing market].”

The measure would bring the Panhandle region, from Escambia County over to Franklin County, under the same standard that requires new homes built in Florida to withstand 120-mph storms.

Lawmakers carved out an exemption in 2000 for inland areas in the Panhandle on standards for withstanding wind-borne debris. Regulators beefed up the Panhandle wind insurance codes last year, but not to the same standards as the rest of the state.

Area home builders and some Northwest Florida lawmakers complain that there is no way to measure how much the new building codes will make rates fall, even though construction costs are sure to rise.

“We’re not overly happy about it,” said Jack Glenn, director of technical services for the Florida Home Builders Association.

Studies show that the most vulnerable homes in the 2004-05 hurricane seasons were older homes, Glenn said.

“I’m having a problem in my mind understanding why they’re laying this off on new homes. It’s the existing housing stock that’s the problem.”

The home builders association estimates that the change will raise the cost of a new home in the low to moderately priced market by $2,500-3,000, mostly the cost of storm shutters and impact-resistant glass.

Sam Miller, executive vice president of the Florida Insurance Council, acknowledged there may be no way to measure the effect a truly statewide building code will have on Florida insurance rates.

“The real benefit is perception. Everybody knows the stronger the building codes, the lower the losses will be,” Miller said.

There’s little doubt that after being hit by seven storms in a 13-month period, Florida is facing an insurance crisis. Escalating property taxes and the high cost of a Florida home mortgage to purchase a home in the first place are pricing many people out of the market. Hopefully, this measure offers some measure of relief to the citizens of Florida.